Ford Family Shuffles Wealth

The headline out of Ford Motor's annual proxy statement, released Friday afternoon, is no doubt that the company paid chief executive Alan Mulally and executive chairman William C. Ford Jr. each $26.5 million in 2010.

That's in addition to the big stock payouts Ford made to the two men last month as a reward for the automaker's turnaround -- $56.5 million in Ford shares for Mulally and $42.4 million for Bill Ford Jr.

Just as interesting, though, is the fact that elder members of the Ford family appear to be reducing their personal stakes in the company by selling or giving shares to other family members.

The Ford family owns less than 2% of the company's shares, but controls 40% of the voting power through a special class of stock. There are 71 million Class B shares, about three-fourths of which are held in a voting trust. The rest are held by individual family members. The family has a pact that Class B shares put up for sale will first be offered to other family members.

It would appear that's what has happened recently. Patriarch William Clay Ford, the last surviving grandchild of Henry Ford, owned 9.5 million Class B shares, or 13.3% of the total, as of Feb. 1, 2010. But a year later, his stake is down to 6.7 million shares, or 9.5%. Bill Ford Sr.'s current stake, including an estimated 26.3 million common shares, is worth about $500 million.

Meanwhile, his son Bill Ford Jr., the company's executive chairman, has increased his Class B holdings to 6.9%, from 5.8% a year ago. (He also owns 14.7 million common shares)

The largest owner of Class B stock is Lynn Alandt, a cousin of Bill Ford Jr., who owns 7.4 million shares, or 10.5% of outstanding Class B shares.

Also divesting Class B shares in the past year is another cousin, Eleanor Ford Sullivan, who reduced her Class B holdings to 3.6 million shares, or 5.1%, from 7.9% a year ago.

Some Class B shares are going to various trusts, perhaps for younger generations, according to the proxy. Trustee David Hempstead, a Ford family attorney, now controls 7.3 million shares, or 10.3% of the Class B shares, up from 8.64% a year ago.

Hempstead was not available for comment, and a Ford Motor spokesman did not immediately return a phone call.

Ford last month gave Mulally $56.5 million in stock and Bill Ford $42.4 million in stock as a reward for the automaker's turnaround.

I'm the Detroit bureau chief for Forbes, which means I spend most of my time covering the automotive industry. But I also keep an eye on the rest of America's heartland—where stuff is manufactured and grown. I've been on the auto beat for more than 20 years at Forbes, Busine...